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The G20 must show global leadership to tackle COVID-19

M Emilia Berazategui

Global Advocacy Coordinator, Transparency International

The human cost of the COVID-19 pandemic has been immense. Nearly 25 million people are estimated to have been infected and more than 800,000 have lost their lives. The economic cost is only starting to be felt, but it is estimated that between six and eight per cent of the global population could be forced into poverty as a consequence.

As a global community, we are dealing with a crisis unlike any in the last century. A crisis that knows no boundaries and that calls for global leadership. As the G20 meets this week, has it, in its own words, done enough to deliver a transparent, robust, coordinated, large-scale and science-based global response?

What has the G20 done so far to tackle COVID-19?

The G20 brings together both developed and developing countries from six continents. Collectively, they account for around 80 per cent of the world’s economic output, two-thirds of global population and three-quarters of international trade. The G20 is uniquely placed to develop and implement a comprehensive response to the pandemic and counteract its social, economic and financial impacts.

To date, the G20 has published several statements and held more than 75 virtual meetings, including an extraordinary Leaders’ Summit. At this, G20 Leaders not only committed to using all available policy tools to minimise economic and social damage, restore global growth, maintain market stability, and strengthening resilience, but also to injecting over US$5 trillion into the global economy.

In April, G20 Finance Ministers endorsed an Action Plan in response to the COVID-19 pandemic, setting out the key principles guiding their response. This included a Debt Service Suspension Initiative, through which Ministers agreed to a temporary suspension of debt payments from the poorest countries. In May, Trade and Investment Ministers endorsed a Actions to Support World Trade and Investment in Response to COVID-19.

Based on publicly available information, G20 has pledged over US$21 billion to fight COVID-19.

Concrete measures to ensure funds reach those that need them most are missing

Wisely used, the available resources provide an opportunity for countries to not only prevent more deaths and protect livelihoods, but to strengthen healthcare systems, safeguards jobs and boost economic recovery. An opportunity that nobody can afford to lose.

Corruption risks don’t disappear in a crisis. A scan by Transparency International of media stories about recent COVID-19 corruption cases found thirteen that included reliable estimates of the public funds lost. In just these thirteen cases of malfeasance, the losses were an astonishing US$570.5 million.

Corruption is not just about public funding being diverted into private pockets. It is about the failure to meet peoples’ most urgent needs. Those media stories include cases of protective equipment, ventilators and other critical supplies being bought at inflated prices using improper procurement processes; being delivered late or not at all; or being so defective as to be useless. Corruption is undermining responses in public health, employment, economic recovery, food security, and other areas relevant for the G20.

The cost of corruption itself is not in question: estimates that 20-30 per cent of the value of public projects are lost to corruption are widespread. In normal times, this loss creates significant costs for governments, businesses, and citizens. During a pandemic, it can mean the difference between life and death.

Worryingly, it is apparent that some governments do not have the resources to track the money they are receiving to address the pandemic. In June, a public official was quoted saying that their government did not have the resources to track down the US$645 million it was planning to spend in response to COVID-19. A situation that is certainly not unique.

The public official did not say their government didn’t know how to track those millions. He said they couldn’t afford to. Given the corruption risks, the obvious question is, why not take a portion of that US$645 million, say one per cent, and invest it in tracking where the other US$639 million are going? That one per cent could prevent potential losses of 20-30 per cent.

This is critical, because we have compelling evidence that anti-corruption measures work in crisis situation. Following Hurricanes Katrina and Rita in the United States in 2005, a review by the Government Accountability Office (GAO) found that an estimated 10-22 per cent of total relief payments had been lost to corruption and fraud. After anti-corruption measures were added to relief efforts, six years later after Hurricane Sandy a comparable GAO review put potential losses to fraud and corruption at only 2.7 per cent of total spending.

Anti-corruption, a well-known toolkit for the G20

Since 2010, the G20 has made the right noises, ranging from setting up a specific working group on anti-corruption, to developing more than 60 documents that address the key areas G20 countries must take into account to ensure transparency in the way funds are spent and to reduce the risks of misuse.

The magnitude of this crisis requires the G20 to take action. At this week’s G20 Anti-Corruption Working Group meeting, we don’t need more high level declarations from G20 representatives saying how committed they to the fight against corruption. These will do little to save lives. We need clear and concrete measures to make sure public funds reach their entitled beneficiaries.

Including anti-corruption measures as part of the resources countries are receiving is key to ensuring they reach those who need them the most, but we can do more.

The G20 and its Anti-Corruption Working Group should ensure that COVID-19 funding includes a specific budget line for anti-corruption, transparency and accountability measures. This would help ensure sorely needed funds reach their intended beneficiaries in at least three ways:

  • Key institutions and non-state accountability mechanisms would have access to the resources they need to operate, instead of having to fight for a portion of shrinking public revenues.
  • Funds in this budget line would support the independence of oversight institutions and make them more resilient to political pressures. If anti-corruption systems become more effective, political figures and their allies cannot act with impunity without facing legal consequences, and companies could be barred from bidding for public contracts.
  • A specific anti-corruption budget line as part of financial support packages would make it more difficult for public officials to make excuses for not taking action against corruption.

When the lives and livelihoods of millions of people are at stake, preventing corruption should be a priority and the G20 should be showing global leadership. Having specific budget lines for anti-corruption, transparency and accountability could save billions of dollars that would then reach the people who need it most.

Will the G20 take action?

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